Carbon Capture, Utilisation and Storage (CCUS)

Why in the News?

Union Budget 2026-27 has announced an allocation of Rs 20,000 crore over next 5 years to support the development and deployment of Carbon Capture, Utilisation and Storage (CCUS).

About CCUS

• IEA defines CCUS as technologies that capture CO₂ from large stationary sources like power plants and industries.
  • Goal: Prevent captured CO₂ from re-entering the atmosphere via storage or utilisation. 
• Capture techniques: Separating CO₂ from industrial gas streams through Direct Air Capture (DAC), solvents (chemical or physical), Adsorption, Cryogenic separation etc.
  • Captured CO₂ is then dehydrated, compressed, and transported to designated sites via pipelines, though shipping, rail, or trucks.
• Storage: Unutilized CO₂ is permanently trapped in geological storage which includes EOR (Enhanced Oil Recovery), ECBMR (Enhanced Coal Bed Methane Recovery) and permanent storage options like saline aquifers and basalt storage.
• India's Target: 750 mtpa (Million Tonne Per Annum) of CO₂ capture, utilization, and storage in NITI Aayog's report titled 'Carbon Capture, Utilisation, and Storage Policy Framework and its Deployment Mechanism in India'.

Significance of CCUS for India

• Decarbonization of hard to abate sectors: CCUS is only known technology for decarbonizing hard-to-electrify and CO₂ intensive sectors such as steel, cement, oil & gas, petrochemicals & chemicals, and fertilizers.
• Enabling the sunrise sectors (coal gasification/low-carbon hydrogen): It can enable cost-competitive production of blue hydrogen (i.e. coal gasification-based hydrogen production coupled with CCUS) based on utilisation of India's rich endowments of coal.
• Energy, materials & food security: CCUS can enable 'Circular Carbon Economy' in India through conversion of captured carbon into value-added products and help in reducing India's import bill. (see infographic)
• Sustenance of existing emitters by retrofitting: E.g., Nearly two-thirds of India's crude steel capacity have an age of less than 15 years, which can be saved by retrofitting with CCUS infrastructure.
• Achieving Net-Zero Emissions Targets: India's net zero target would require sequestering 11.4 GtCO2e (gigatonnes of carbon dioxide equivalent per year) cumulatively till 2070.
  • CCUS can reduce emissions from India's power and industrial sectors (contributed around 60% of total emissions in 2020).

Challenges associated with implementing CCUS

• High Costs: CCUS projects will require upfront capital investments of US$ 100-150 billion for 750 mtpa of CO₂ capture, utilization, and storage.
• Technological limitations: 
  • CO₂ utilization technologies are relatively less developed: Compared to capture technologies.
  • DAC in early stages: Its economics (present cost estimated at- US$ 400-800/tonne of CO₂) and scale of operations are yet to be established.
• Retrofitting Difficulties: Retrofitting older plants (coal/cement) with CCUS is technically complex and cost-intensive.
• Geological Storage Risks: E.g., if CO₂ is injected too forcefully it can fracture the rock and potentially induce seismicity (micro-earthquakes).
• Regulatory: Lack of clear legal frameworks defining who is responsible for safety, maintenance, and potential leaks creates immense financial risk for private investors.
• Limited data on storage: geological data on the pore space availability in India for the storage of CO₂ is limited, especially for saline aquifers and basaltic storage. 

Way forward to implement CCUS in India

• Incentivize & de-risk CCUS projects to enhance Private sector participation:
  • Public/government funding: Through financing mechanisms like 'Clean Energy Cess', low-cost sovereign or International Green Funds, Carbon Bonds or Climate Funds
  • Support to Low carbon or carbon-abated products: Through preferential procurement in Government tenders and Production Linked Incentive (PLI) schemes.
  • Targeted Policy Interventions: Like financial framework such as a Carbon Capture Finance Corporation (CCFC) to support CCUS projects, carbon credits, capital and operational subsidies for capture plants, tax holidays for CCUS projects etc.
• Promote R&D in novel CO₂ utilization technologies: Foster and incubate innovation-based ecosystems through national centres of excellence like National Centre of Excellence in Carbon Capture and Utilization at IIT Bombay.
• Technology transfer: E.g., Knowledge sharing through Mission Innovation which has Carbon Dioxide Removal as one of its missions.
• Draft national CCS regulations and legal framework: To cover the entire CCUS value chain focusing on CO₂ ownership, liability for transport and post-injection, and carbon accounting.
• Mapping storage site: Government can map CO₂ source-sink corridors and characterise geological storage potential across priority basins.
• Hub and cluster model: Hub-cluster models in KG Basin and Rajasthan can unlock CCUS economies of scale.
• Machine Learning for Geological Data Analysis: E.g., the CarbFix project in Iceland uses machine learning models to predict CO₂ injection impacts and optimize site selection based on geological data.

Conclusion

India is the 3rd largest emitter of CO₂ in the world after China and the US. CCUS is a key technology for decarbonizing hard-to-abate sectors and supporting India's NDC commitments like reducing CO₂ emissions by 50% by 2050. However, high costs, technological gaps, and regulatory issues must be addressed through strong policy support, innovation, and private participation to enable its effective deployment.